I’ve been watching the AI buildout for a while and noticed that some of the companies benefiting aren’t always the popular names investors look for. Most of the time, investors focus on news from Nvidia (NVDA), Microsoft (MSFT), and other big names, and it’s easy to forget that the companies that build the servers and other gear needed for data centers also benefit from the AI buildout.
Jabil Inc. (JBL) is one of those companies. It is a contract manufacturer that other businesses pay to build their products. The company serves many customers, including major players in the AI buildout and big tech names like Apple. It’s an American company, founded in 1966 near Detroit, Michigan, and now headquartered in St. Petersburg, Florida.
With the AI rally and a strong customer base, the business is doing quite well. Jabil posted fiscal fourth-quarter revenue of $10.62 billion on Sept. 30, up 29% from a year earlier. It also beat Wall Street’s expectations of $9.7 billion, and the stock is up by more than 30% in 2026.
Bank of America keeps its $475 price target on Jabil
According to a BofA Global Research report shared with me, analysts Ruplu Bhattacharya and Wamsi Mohan kept their Buy rating on Jabil and maintained their $475 price target. That price target is almost 59% above JBL’s recent share price of about $299. And Bank of America made the call after hosting personal meetings with Jabil’s leadership team in New York City on Oct. 7.
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Both analysts cover electronic manufacturing services and hardware technology for BofA Global Research. They also wrote in the note that “Management’s tone was strong, and we walked away incrementally more confident in the breadth of opportunity to increase revenues and earnings.” The $475 target is based on 19 times BofA’s estimated 2028 earnings per share.
Jabil ended fiscal 2026 with $36 billion in total revenue, and its management now expects to generate $44.5 billion in fiscal 2027. However, BofA believes Jabil’s estimate is conservative, and the company could end up beating expectations later in the year.
Hyperscale AI customers lead the growth outlook
Jabil has three primary hyperscale clients. These clients are basically the popular cloud companies that hire Jabil to build the gear they need for their AI data centers.
According to the BofA note I received, Jabil’s work with its biggest hyperscale client is set to stay strong in fiscal 2027. It also expects its second major client to make up more than 10% of Jabil’s total revenue for the new year. The third hyperscaler could also have similar results over the next few years (Jabil keeps the identities of its three hyperscaler clients confidential).
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Jabil and Adani Group also announced plans in June to form a strategic alliance to build AI data center infrastructure in India. Although Adani is not a hyperscaler, BofA described the partnership as a “multi-billion dollar and multi-customer opportunity with scope for global reach.”
Jabil’s growth in healthcare and defense gives it a safety net
Jabil has launched five new factories that make products for customers in the industrial, healthcare, and aerospace and defense sectors. Although this means JBL is growing, the new sites are still affecting the company’s profit for now. But that should change once they start running at full capacity.
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Jabil has also been securing a lot of new jobs recently. The company has orders to make all kinds of medical devices, including the equipment used to make weight-loss drugs. It is also working directly with some of the biggest companies in the defense industry.
That mix of customers from different sectors gives Jabil a real safety net to fall back on if AI spending ever slows down. BofA described the company’s diversification into various industries as “adequate downside protection.” That is why the bank is comfortable staying bullish.
